Ukraine hires Washington lobbyists to help block NS2 pipeline

Ukraine’s state-owned oil and natural gas company Naftogaz has hired a a firm of political consultants in Washington DC to lobby against proposals to build the Nord Stream 2 (NS2) natural gas pipeline between Russia and Germany under the Baltic Sea. The Ukrainian company is paying Yorktown Solutions a $37,000 retainer until the end of the year in its campaign to stop construction of the new pipeline – which has the financial backing of several French and German investors – ostensibly as it will increase EU dependence on Russia for its energy supplies, but also because it will deprive Kiev of a valuable transit revenue stream that netted the country’s treasury just over $926m in the first nine months of the current year alone.Ukraine has the backing of several Central and East European countries in its opposition to the pipeline as well as that of EC President Donald Tusk who last week urged all EU member states to “proceed swiftly” to approve proposals tabled earlier this month to extend EU onshore gas rules to cover the new offshore pipeline. The legislation in question is the so-called Third Energy Package that allows for third-party access to online gas pipelines and the unbundling of pipeline operators from the parent energy operators – which in NS2’s case is Gazprom – as well as the setting of non-discriminatory tariffs and requiring more transparent operations. So far, the US has largely stayed out of the controversy, although the sanctions it has imposed on Russia after its annexation of Crimea and subsequent events in east Ukraine could discourage investment in the pipeline.